'A Turning Point in the National Climate Debate'

Mark Green
Posted March 31, 2021

API’s new Climate Framework touched off predictable reaction from certain circles – ranging from groups that oppose industry’s very existence to others focused on a single aspect of the framework, carbon pricing.

Frankly, API’s action plan speaks to the vast majority of Americans who support commonsense approaches for lowering greenhouse gas emissions and further improving environmental protections – while also providing the energy from natural gas and oil that our country needs to grow and prosper.

Through the Climate Framework our industry is offering substantive leadership on the climate/energy challenge, with the overarching goal of meaningful progress.

As the framework points out, meeting this challenge requires broad collaboration, new partnerships and new approaches. Action, not more polarizing, agenda-driven talk. API’s Climate Framework is focused on action, including some steps that are new ground for API and the natural gas and oil industry. From the framework:

Our industry is essential to supplying energy that makes life modern, healthier and better – while doing so in ways that tackle the climate challenge: lowering emissions, increasing efficiency, advancing technological innovation, building modern infrastructure and more. … This framework lays out what government can do, what our industry will do and what policies will enable our continued efforts to ensure energy delivery and emissions reduction. We will continue innovating to further reduce production-related emissions and to make delivery systems and consumer products that achieve environmental progress. We will build on our industry’s long history of developing technologies and solutions that advance modern life.

To be sure, the framework details API’s endorsement of a government carbon price policy that applies to all sectors of the economy, is market-based and transparent, among a number of features. That part of the framework has drawn the most attention, but it’s just one part. The framework is much more than that one facet.

For example, the framework calls for accelerating technologies and innovations that are and will be brought to bear to tackle the challenge. This has been industry’s strong suit throughout its history and will be going forward.

Specifically, the framework calls for federal funding for low-carbon research, development and deployment. This includes carbon capture, utilization and storage (CCUS). The U.S. already leads the world in CCUS with 12 commercial-scale, operating facilities that can handle about 25 million metric tons of carbon dioxide a year. CCUS takes CO₂ emissions from facilities of all kinds, not just natural gas and oil, safely storing and/or repurposing them. Expanding this technology is one of the keys to a lower-carbon future, and API supports federal policies to do that – including extending and expanding the 45Q tax credit.

API also will push for and support policies that advance construction of hydrogen technology infrastructure, which will help expand the role of hydrogen in decarbonization. API President and CEO Mike Sommers:

“There’s nobody better equipped to drive further progress than the people who solve some of the world’s toughest energy problems every day. As our industry accelerates efforts to advance groundbreaking technologies, reduce emissions and drive transparent and consistent climate reporting, we urge lawmakers to support market-based policies that foster innovation …”

Our industry is committed to further reduce emissions from its operations. Methane emissions account for about 10% of total U.S. greenhouse gas emissions on a CO₂-equivalent basis, which is why API earlier this year announced support for direct regulation of methane from new and existing sources. This new policy stance reflects industry’s belief that direct regulation is key to reducing emissions and sustaining public confidence going forward.

It’s one way to build on progress already made in lowering methane emissions rates from natural gas and oil production, with government data (see here and here) showing that emissions per unit of production from key basins fell nearly 70% between 2011 and 2019.

Helped by the programs of The Environmental Partnership, whose participants represent 74% of new U.S. onshore natural gas and oil production, companies are improving equipment, using advanced technology to detect and fix leaks and working to reduce flaring.

The framework also touches on producing cleaner fuels and driving climate reporting, which is essential in developing a solid knowledge base upon which sound climate policies can be based. The point, again, is that this Climate Framework specifies multiple actions that can address climate while industry continues to provide needed energy.

It’s a bold, constructive framework, and industry looks forward to engaging with the Biden administration and others who will be partners in meeting this challenge. Here’s what some others are saying about API’s Climate Framework:

Sean McGarvey, North America’s Building Trades Unions president:

“API’s new framework for climate action is a bold and thoughtful proposal that can help guide our country's fight against climate change. NABTU is proud to partner with API and support their efforts to address one of the greatest challenges of our time.”

U.S. Rep. Henry Cuellar (D-Texas):

“The American Petroleum Institute’s new climate policy framework is an important step by the industry in working to address the risks of climate change while continuing to produce reliable, affordable American energy. Natural gas and oil are key economic drivers in Texas and the rest of the country, and industry actions that further reduce their environmental impact are helpful contributions as the U.S. works towards developing economically sensible solutions that reduce greenhouse emissions and fight climate change.”

Jason Grumet, Bipartisan Policy Center president:

“Having the world’s largest, and most technologically advanced logistics companies working to deploy climate solutions on a massive scale is critical for success. API’s new support for federal legislation to accelerate the development and commercialization of clean technologies and reduce emissions could be a turning point in the national climate debate.”

Alex Flint, Alliance for Market Solutions executive director:

“This may be the most important climate policy development since the election of President Biden. Climate change has been deeply politicized for over two decades. To get any major climate policy enacted, we need factions to move, negotiate, and compromise. And the American Petroleum Institute has just made a big move.”